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tv   Fast Money  CNBC  February 11, 2013 5:00pm-6:00pm EST

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anged you got to bring it in. if your tires need to be rotated, you have to get that done as well. jackie, tell me why somebody should bring they're car here to the ford dealership for service instead of any one of those other places out there. they are going to take care of my car because this is where it came from. price is right no problem, they make you feel like you're a family. get a synthetic blend oil change, tire rotation and much more, $29.95 after $10.00 rebate. if you take care of your car your car will take care of you. investor. yeah, ibut i'm a busy guy.or it used to be easier but now there are more choices than ever. i want to know exactly what i am investing in. i want to know exactly how much i'm paying. i want to use the same stuff the big guys use. find out why nine out of ten large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal.
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i'll be back with my observation tomorrow night. before we go, take a look at the day on wall street. the markets are off some pressure today. however, the dow jones down about 21.73 at 13,971. nasdaq down one point and the s&p down just a fraction. thank you so much for being with me. see you tomorrow. stale with cnbc "fast money" begins right now. live from the nasdaq market site in new york city's times square, i'm melissa lee. here are tonight's top three trades. more money, more problems? why a drastic pay back may be
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the shareholder's best bet. energy independence. and, when it comes to oil, the focus is on north america, not the middle east. and gold breakdown. dennis gartman on why gold continues to lose its luster. but first, got to get to our top trade here, because the s&p 500 is hovers at 1500 yet again, our traders have found ways to play this rally. guy? >> hi, mel. >> valentine's week, just so you know. waiting for my gift. you laugh. valuation is crazy, 21 times forward earnings. you go back to the last quarter, operating margins, much better than expected. i know valuations are stretched. wig short interest here. still goes higher. >> is that connected to valentine's day week? >> no. nothing to do with it. >> not taking your wife to dunkin' donuts? >> just making sure mel knows, i'm waiting for my gift on thursday and that's putting it out there. >> wow. >> keep on a-waiting. pete? >> medical equipment.
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look at medtronic. they continue to hit 52-week high. had option activity last week. more followup activity today. before their earnings next week, a week from tomorrow, we're going to see a big number out of them. this entire sector has been going higher. i think they get through 50. >> medical devices. anything to do with valuen fine's day, as well? >> a hip, a joint. a way to get to your loved one's heart -- >> google. thought about selling it this morning. i didn't sell it. i think you buy this thing on dips. there's plenty of reasons to make this thing go higher. i would not be a seller just yet. >> tim? >> google, valentine's -- searching. >> it's a theme. >> petrobras. this is a former darling of the emerging market. major problems, it's not about it. the stock's been giving a bad wrap. they have production issues and most definitely have cash
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issues. but sentiment is as low as it's ever been. this is a stock that's had low sentiment. take a shot. we're not betting the farm. this is a very interesting story to take a shot. >> production issues. is this a valentine's day -- >> tell you what, steve. that's for the afterhours. >> let's move on here and talk about apple, which has outperformed the market today. speculation is growing about what apple will do with its $137 billion cash pile. our next guest says half of that money should be going to shareholders. let's bring in brian marshall, analyst at isi. brian spoke with apple's cfo on friday. i know you said in your note that talking to apple management is trying to wring water from a stone. but what did the cfo say about this notion that capital will be returned to shareholders? >> thank, melissa. putting on a press release last week, in sort of rebuttal to greenlight's proposal for the 4% preferred, was a hushg lean
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thing for them. they typically don't comment on anything. so, they clearly are kind of champing at the bit with respect to talking about more capital allocation and it's my view we're going to get a bump to what they've already said. my best guess is probably this quarter. >> and you have very -- a pretty specific plan as to what they should do and how much they should do it by in terms of increase in the dividend, as well as increase in the share buy-backs. can you walk us through that? and, did you run this by peter oppenheimer when you were talking to him? did he give you the wink, wink, the nod, you may be on the right track here? >> yeah, that doesn't happen. but ultimately -- >> if it did? >> yes. but at the end of the day, apple's a company that generates roughly $40 billion of free cash flow or net income. we make the claim they're a mature company now. it's basically very quickly made the migration from a growth story to a value story. when that happens, return to capital -- capital allocation return to shareholders becomes paramount to your returns.
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we make the case that apple should basically give back 50% of its cash flow on an annual basis to shareholders. we recommend two-thirds of that go to dividend. one-third go to share buy-back. so, that would imply $60 billion returned to shareholders over the next three years, versus already defined plan of $45 billion. so, that would equate to 300 basis point dividend yield and roughly buying back about 15 million shares, or 1.5% of the float per year, so, we think that would be the optimal strategy. >> so, brian, as the stock was headed to $700 into the fall, there was a level of arrogance when it came to their cash position that they didn't seem to want to address it. do you feel that management is being pressured into making a move, given the, i guess for lack of a better word, precip does drop? >> i definitely they want to. i think there is a realization that this is a company that grew for so long and now we're kind of slammed on the brakes very
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quickly. i don't think demand for apple products just went away overnight globally. so, i definitely think they're going to continue to grow. but clearly, this is much more of a value story now going forward and i think they realize what they need to do. i think a $300 drop in the stock woke up a lot of eyes in cupertino. so, they want to do what's right for the shareholders. >> brian, you had two points -- it's tim. two points in your note. one, you think the postpaid subscription base, the potential there is massive. i agree with that. what you said, the next, essentially paragraph in your note was talking about the mojo and in innovation is still alive and well at apple. that, to me, i think is a very, obviously, intangible element on some level, in terms of investors here and now. i don't think we expect anything down the gate. which is the more important part? the four times, you know, growth of the international postpaid subscriber basis, a real number
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people can attach to valuation, where as the wow factor, i'm not sure apple is, you know, with the hipsters right now. >> that's a good point, tim. we estimate that 800 million postpaid sub-market abroad, you nope, with their over 250 global carrier partners versus the 200 million domestically with the three u.s. partners, so, 4-x opportunity there. but the per capita income china, 2,000 versus $50,000 in the u.s., so, the affordability just isn't what it is in the u.s. coupled on the fact that carrier subdies are much lower typically abroad, as well. so, we think apple needs to bring in a half price phone, a $300 wholesale phone for the international markets and if they can do it and it's an be interesting form factor, that could accelerate earnings. until then, it's going to be difficult for them. >> brian, can we say good-bye for good to the days where apple was, in fact, a growth stock and
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had the high rates of growth? is that completely a thing of the past, now that it's sharing its shareholder base? this doesn't sound like the apple of the days of yore, so, maybe $700, we won't see that for a long time? >> it brings a tear to my eye to say so, but i think that's correct, yeah. ultimately, you know, always the first question, or, if you go back to a marketing meeting with an investor a year or two ago, first question, apple. it's typically about, what's the product look like, what's going on? apple has underperformed the s&p 500 by 1500 basis points. it's typically the last name brought up in the meeting and the question people ask about is capital allocation. all those things basically kind of lead me to believe this has already made the transition to a value stock. i still think there's an opportunity here. a value stock coupled with acceleration of capital return ratios, i think can be very attractive. but this is more like an exxon, mcdonald's, intel now, opposed
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to an emc. >> brian, great to see you. thank you for your time. brian marshall of isi. more like a microsoft, intel or exxon. that's really speaking volumes. >> i'm not in the camp with everybody else that says apple has to get the money back to the shareholders right now. dividends, forget about it, in my opinion. i think a lot of activists and guys who have been chasing the stock finally got into the stock at its high levels that now they want to pressure the company on what they should do with their money. i don't agree with that at all. i think they should spend that money on innovation through acquisition. that would be a far smarmenter way. some share buy backs, as well. >> what do you want them to acquire at this point? >> whether or not they want to do something like intel did, create a venture capital firm, where they invest in names. maybe they get in the early rounds, i know it's not early, but -- >> isn't that more of a concern -- >> i'm not concerned. >> a lot of good money, cisco trying to -- >> i don't agree. that's actually where they're going to get the innovation. they've got to get growth right
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now. i don't think this is a value play at all. everybody wants to make this into this value company -- >> you think it's a growth play still? >> i think they have the cutting edge sort of ideas, but they've lost their way. >> then you get in the growth for free because it is valued as the same as intel. you get the growth for free. the reason wheel are not getting in front of this are because they are waiting on that dividend. >> let me ask you guys something. google is trading at $780 a share, right? zero dividend, they are sitting on the same percentage of cash. 25%. >> but it's a growth story. >> but it trades at a 14, 15 p.e. this is ludicrous to me. i can't understand why they all -- they all want the money because the fact that they paid $600 for the stock. >> saying these guys are going to acquire their way into some number area, i think, scare the heck out of people. >> a lot of people have talked about netflix for instance and other names where you could get content and really get yourself back into -- >> how about doing what you do well and doing it at a better
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price point? how about saying, samsung is in a better place in having a lower priced phone. >> if they had a lower priced phone or a bigger phone? >> rather than say, i'm going to go by -- >> that's the second half of the year story we've been talking about it. they do have to get exactly what you're talking about. >> you are a buyer of apple? >> well, there's a call right here now that says, apple test five ten and until then, i say it goes higher. in the short run, they're not going to be able to create a phone that fits into the $195 place they need to to get china mobile and t-mobile abroad as brian has said, in his note, that's where the -- >> gone are the days where one size fits all. you are not going to go to apple when it comes to -- >> if hay had the watch computer? >> i would rather buy the glasses from google. >> i don't understand the watch at all. that's a real reach and they'll go the same wake as microsoft did. >> good debate, guys. be sure to tune into "halftime" tomorrow. scott's at the goldman sachs technology conference.
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tim cook scheduled to speak at 10:15. we will take that live, as well. coming up next, why one leading strategist believes we'll become energy independent much sooner. "fast money" gets an exclusive look behind citigroup's new report. and, this transport stock who has two of our traders on opposite sides of the track. back after this. what do you see? um, i see a duck. be more specific. i see the aflac duck. i see the aflac duck out of work and not making any money. i see him moving in with his parents and selling bootleg dvds out of the back of a van. dude, that's your life. remember, aflac will give him cash to help cover his rent, car payments and keep everything as normal as possible. i see lunch. [ monitor beeping ] let's move on. [ male announcer ] find out what a hospital stay could really cost you at
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standard at citibank. welcome back to "fast money." watching facebook slip in the afterhours here. analysts at bernstein now less excited about the social network. they believe that towards the end of this year, when facebook starts lapping harder comps, the growth rates for north american and western european add rates could rise. they downgrade facebook to market perform with a price target of 27 bucks. melissa? >> thank you, josh lipton. north america plus western europe accounts for 70% of facebook's revenue, which i did not know. and that's why there is the concern about price per ad growth. >> pete has been spot on facebook since it was -- right on. but then, we had young anthony on a few weeks ago, did a street fight, which we just had on live television between the guys, and we talked about how facebook --
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>> right, right. >> i said be careful here at . 32 32.50 -- >> did you say it in that condescending tone? >> son of a gun. >> that's why we do the street fights. >> that's one reason why. but this afterhours downgrade is very unusual. usually we get them before the bell. interesting this lands afterhours here. we are seeing the stock react pretty sharply. >> it's been reeling since the earnings. since then, we eased back slowly. the 30 level seemed to be a level once we broke through there, that seemed to be a level of support other guys were looking at. now we broke, look for the next level. steve? where are we at? >> you have to go down to 24 and frame this at $32.24. >> frame it. >> frame it. >> surround the trade? is that surrounding the trade? >> surround the trade because he's selling upside calls. >> i like that, actually. that's a great -- >> actually make money trading facebook. >> while being down on facebook,
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making money back by selling those. every time the calls and if you look at the options in here, pretty inflalted volatility most of the time. you get a fairly decent premium. this is something where i had the stock for multiple months. nine, ten months receiving upside calls against it. been a great opportunity to actually at least lower the price in which i paid for the stock, which is much higher. >> let's talk about google here. if one of google's big execs is cashing out some of his stock, is that a sign that you should, as well. ? according to a regulatory filing, eric the ik sic this mst to cash out. the stock neerps an all-time high. is that a sign that the top is in? making too much of it here? >> making too much of it. the first thing you learn on wall street is there's plenty of reasons people sell stock. only one reason why they buy. i don't want to read into his process. i'm going to stale long on the stock. >> that's a pretty big diversification process, though.
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>> he's still got a lot of money left in it, though. >> less than half of his stake. skin in the game. but the question here -- >> less than half? saying it's only a little less than half as if that's not a major move for a company head. >> well, i think that maybe the more concerning thing for a shareholder, if you like eric and his involvement in the companypearing back his role in the company and is about to do that? >> sure. >> i tell you what's working -- i don't know the answer to that question, but i tell you what is working, yahoo!'s been a monster. we've all talked about it. stock pushed to 21 today, up 2% on a benign tape. yahoo! still works here. >> all right. according to our next guest here, north america could soon be the new middle east in terms of energy production. the boom in natural gas and crude oil could put the u.s. on a path to energy independence much sooner than you might expect. ed morse from citigroup joins us. ed, always great to see you.
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>> good to see you. >> we had the resources in north america to be the middle east in terms of oil for awhile. so, what now is changing the environment such that it can happen? >> well, we had a price trigger over the last decade and that led to innovation and the employment of a lot of cap tam by a lot of companies and here we are growing our production base by over million barrels a day per year and there's no real end in sight. >> a key also to this is oil demand will come down. we're actually hitting the sort of, this trajectory growing independence as the confluence of factors are forming where the consumption will come down. >> the consumption has come down. we were consuming 22 million barrels a day only in 2005 and now we are consuming 3 million barrels a day less than that. and a lot of that has been in the last five years. >> so, what's going to be the incentive for oil companies to continue producing to reach this energy independence if consumption is already coming down and the prices are falling? >> we live in a world where
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petroleum products are to global market. demand globally is continues the grow. as long as the product demand is there, prices will be there. they may, in fact, they are almost certainly going to be lower five years from now than they are now. still enough for a pretty healthy profit. >> how low are we talking about? that has ripple effects throughout the economy in terms of consumers of oil. >> sure. actually we think that the trading range of rent, which has been 90 to 120 solidly is going to see that $90 floor become the $90 ceiling by the end of the decade. >> grasso, you have a question? >> ed, where am i going to see this growth? i'm long pxd and the sector that's perplexed many has been the refiner space. to me, it seems like those are the true beneficiaries of it and the upshot will still last for them. >> well, there's no doubt that the refiners will continue to benefit, because we're still essentially a landlocked country and we'll have the feed stock for refiners, crude oil being pruced under world market levels
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for as far into the future as i care to think. in terms of the service companies, this is a phenomenon that's going to explode across the planet by the end of this decade and companies that know how to do this drilling, the companies that are going to be -- going to benefit from this spread of the u.s. revolution to the rest of the world. >> in your note, ed, there was an interesting line in it, because it raises the questions to why some people are pushing for energy independence because they say it's a matter of national security. we want to have all of the energy, be independent of the middle east and other influences. geo-political influences and you say it still will not make the u.s. or north america immune to oil disruptions. >> of course not. it effects the price of oil globally and the more we are in the economy, the more we're going to be impacted. if there's a price spike, we'll feel it. the weight of our production is going to make that price spike
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come from a much lower base in the future than it is now. >> okay, so, $90, as the ceiling for the stock in the future -- excuse me, for oil, in the future, but in terms of the shorter term, you're here, so, we want to get your outlook for oil in the next 6 to 12 months. >> this is a momentous year. almost 2 million barrels a year of pipeline built in the u.s. the u.s. is going to push out 700,000 barrels a day of light sweelgt crude imports this year. as a result of that, plus production elsewhere, the price is going to average, by the time we get to december, ten bucks lower than it is now. >> ed, thank you for joining us. appreciate it. ed morse of citi. stick, i want to go to you. is this a tradeable forecast in your view? >> it is. and, steve said, if you look at what the refiners have done, this is essentially a glut of crude. their spreads have gone through the roof. the two things that stand out to me, i do think that the u.s. will begin to have pricing power in a way they haven't. so, ed pointed out, there's still going to be supply
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disruptions around the world. brent has traded and there's a reason for it. it's been the world's blend. i don't think it will be. this is good for the u.s. it is pushing prices down. the drillers are a great place to be. especially the ones that have the technology that ed is talking about. i still like rig. i think now they've gotten this whole horizon spill clarified, i would stay with these trades, because these stocks have had a lot of weight on them. >> stocks hot in this space, the refiners, many are at multiple standard deviation. >> and it looks like according to what we're seeing in the option market, hot in there for a month and a half or more, if you look at phillips, marathon, valero, tasoro, they got an upgrade from bank of america. if you look at those names, there seems to be a sense on the street that they expect to continue to see even newer, fresher highs to be hit in the next couple of weeks, particularly when you look out to march and even a little further out on the options chain in some cases in marathon. they went to the 2014 january
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calls, so, there's plenty of people out there right now that are looking at those margins, they see what happened with shale. they see the cheaper priced oil and the rest going on right now in that space. i think the names are going higher. >> the move has been parabollic, but the valuation still goes up. bsx, benign day today, but that's where you want to be. coming up next, finding value in the m booing business of etfs. our traders give you their best plays. plus, could a higher buyout price be in the works for dell? we'll tell you the numbers. and later on, all ail board for a "fast money" straight fight. guy and pete bucking heads -- >> bucking heads? >> whoa. get their arguments, coming up next. >> guy looks scared. i'm a conservative investor.
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the world's largest etf conference is well under way and cnbc has been covering it all day today. john najarian is on the floor with some of his best etf bets. what have you found? >> well, given that there are 1,300 people here, the biggest event as far as people coming to see the different offering and so forth, i thought we would look at the real beta plays, pete likes talking about this. how about this one? the direction triple etf for real estate. this one is up about 12% year to date, melissa. beta, twice that of the s&p 500. trades decent volume, as well. because that's one of the things you need to look at. there are some etfs that are,
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you know, tremendous etfs, really, but they just don't have enough interest generated by market making firms as well as the public. this one does have enough. it trades six figure, thousands of shares per day. and then if you want to do go for more, you could goal over there with jpmorgan, the mlp etf. the master limited partnerships that everybody was so concerned with, they might be going away, this one is up 15% year to date. it pains about a 5% dividend yield. and it trades over a million contracts per day, or -- i'm sorry, shares per day and you can even do a little hedging with some of the options, which is another thing i'd offer out there. lastly, the xlv, which, of course, just a piece of the s&p 500. this is up about 8.5%. you get about a 200 basis point boost over the s&p 500 return.
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and it is the health care and biotech part of the s&p 500. trades about 5 million a day and very liquid. so, these are just a few of the ones that i'd focus folks in on that want beta and they really can't duplicate on their own. this is very difficult. in fact, that real estate etf or the mlp, very difficult to get that kind of construction on your own. >> yeah. pete, i want to go to you because your brother cited you and one who is on the hunt for beta. when it comes to the direction on real estate bull that trades 100,000 shares plus per day -- >> right. >> in your view, is that enough volume for a retail investor? >> it certainly would be something, you have to go into this with some caution. when you talk about the reason this becomes a bit of an issue is, if the volumes really start to increase, if it starts to move against you, you might have a difficult time getting out. i'm not just talking about the big investors, even the smaller investors, because the big gentlemen out there and ladies are going to push this around,
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this etf around to the point you are going to be chasing it the entire way down. you really do have to know how much is really offereded in the names. that's why you have to have a little bit of a pause button that you can hit once in awhile so you don't jump in. >> the other question i'd ask the that jnajarian brothers, a these etfs start to erode their time value. >> every day. >> long three times and go to rest and go to sleep. this is a great way to lose money. i'm just curious how you feel about that. a lot of people are dead wrong -- >> any time you talk about the leveraged etfs, you have to understand it. on a leveraged etf, the way they recalculate every single day, that means you're not going to get the movement you expect. you have to use this as a trade. not the best investment in the world. >> short-term. one or two, possibly three days. you're not supposed to use them for long-term holdings, as tim said. it e roerodes right away. >> doc, good to see you. >> thanks, mel. >> we want to hear from you,
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meantime. what do you think will be the hottest etf asset class this year? tweet us #insideetfs. be sure to go to etf -- >> it's all good. >> tweet it out there. dell finishing in the green today. dell out defending the $24 billion deal to go private, saying it is in the best interest of shareholders, so, mike khouw, how are the options traders playing the take at this point? >> it's interesting, because normally what happens when you have these all cash takeovers, you will see options premiums begin to decline. you see a lot of people selling options, options that strike above the proposed sale price. what we've been seeing, the most active options today were the april 14s and more interestingly, the may 14s, we are seei ining opening buyers pg
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25 cents. they are betting that the stock will finish above $14.25 or $14.20 in the april case. that is obviously a bet that the buyout is going to see a higher bid price. i don't know if that's necessarily going to take place or not. we are seeing those bets and these are cheap ways to make them. >> thank you for that, mike. time now for pops and drops. pop here for wendy's, up 3.5%. tim? >> big article about new revamped menu, lounge seating for you to hang out, guy, all day long. this is reason to be buying wendy's. i don't think so. it's expensive. i would fade that move. >> drop for tesla, down 2%. >> new york times article about the fact that maybe in the cold weather, their new car is not going to be able to have the range that people were hoping for. this is a stock that's been on fire, when you look at the automobile industry. this one's been leading the charge for the upside. a pull-back today. i wouldn't be surprised if people want to start dipping back in now on this pull-back. >> did you say the cold weather is going to impact how --
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>> believe it or not. >> what a great rock band. tesla. >> pop here for aol, up 7%. guy? >> our man mark upgraded the name and i reupped my aol service -- >> the diealup? >> i'm not so sure you fade this. i think there's a couple of days. it pushes up to 40 bucks. >> are you shop girl? >> what? what is that? >> you got mail. drop here for caesars, down 9%. grasso? >> it was up like a spike here. this thing came from basically $5 in november and december. so, you have to be careful. it was a heavily shorted name. changed to online gambles. they are a high little levered name. sometimes the best trade is no trade at all. >> oh, yeah. >> yeah. pop here for the year of the snake. >> what? >> sunday marks the beginning of the lunar new year -- >> china growth. >> they are hosting the oldest chinese new year parade with around 1 million people expected
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to attend. 3.4 billion trips will be made in china during the holiday season. >> right on. >> love the use of "china grove" in the background. >> the lions are dancing. >> no, they weren't. >> they looked like they were. >> water snake. >> wouldn't be the first time -- >> wow. you've been waiting all year to pull that one out. >> not at all. just like that. >> wow. >> all right. >> trade school. >> happy new year. yes. >> that's what i'm talking about. >> in canton neez. coming up next on "fast money," why one leading commodities market believes gold is breaking down. the commodities king himself, dennis gartman, is here with a warning you will not want to miss. stay tuned. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves...
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gold at a five-week low on reports of 0 coa coordinated ef. with a view on how to play this, dennis gartman. dennis, good to see you. >> always good to be seen. they're letting apparently everybody down here. terranova is down here, john is down here.
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mark fisher is down here. good day to be down here. >> big old party. in terms of gold, dennis, tell you why you see gold breaking down at this point. >> mel, i think gold is in very serious trouble right here. in dollar terms. i'm still bullish of gold in yen terms. you heard the story before. i been that way, i'm going to continue to be that way. but gold in dollars has broken down decisively. i'm not sure if it's the currency war that everybody's talking about, or simply technical circumstances. bull nonetheless, any trend line you wanted to draw on the gold chart has broken down. a lot of people still long. i think it has a long way to go. the fact that it didn't bounce even slightly today after it broke 19 or $20, all it went was sideways, tells me it's going to go down again. take a look at what's happened in the last hour in dollar yen. dollar yen has gotten very strong. the dollar's gotten very strong. the yen's gotten very weak. it's moved almost a full yen in the last hour. i haven't seen that happen in a very long time. that's in addition to what was going on today. so, something's happening in the yen, in the dollar yen move.
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something's happening in gold. you do not want to own gold in dollar terms under any circumstances. >> dennis, how about holding gold or platinum terms? the spread of gold to platinum is widened out, which reinforces what you are saying. do you want to be a holder of platinum that much more? i'm making the argument that the true industrials metals have a usage, autos, and i think they are going higher. but people are going to be substituting out of gold that are in the trade for other pgms that are working for real reasons and this trade is something you stay into? >> timmy, i think -- the only trade you can have on, if you are going to own gold in nondollar terms is, as you say, to own platinum. that's probably the better trade. and it is indicative of strength in global economic circumstances. we know the story of platinum, it goes into catalytic converters. we are selling more automobiles. if you you have to own a metal, you want to own platinum.
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you don't want to own gold. sell gold or sell gold against dollars or own gold if you must, but only own it in yen terms. i know that's complicated. that's what i'm doing myself. i'm short gold myself in dollars. i'm long gold again yen. i'm short the yen. i've got it on in my own account and in the fund in canada. >> dennis, say hi to the guys for us. >> i shall, mel, thank you, always good to be seen. >> dennis gartman of the gartman letter. well, the sharp decline in coal demand has created a host of problems for csx. but according to barron's, the tide could be changing for the company. in an article of the weekend, they say csx's shares could climb 33% in the next year. is it time to get on board? we have a street fight here. pete, our bull, guy, our bear. 90 seconds to make the case, so, pete, the bull, kicks it off. >> the bull is kicking it off? >> go! >> i'm one of the believers that
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the coal demand has gotten very close to the bottom area, especially if i look to china and listen to the numbers coming out from the eia. they are showing that potentially we'll start to see coal demand at least bottom and probably not sift to the downside any further. when i look at this stock right now, it's far below just about every one of those competitors. that's an advantage right now. when you look at the direction that management is taking, they are moving to oil and autos, they are moving to other areas. they are not completely reliant the way people perceive them to be on coal. for those reasons, the stock does have some room to the upside and i look at the valuation, 14, 15 p.e., i think it's got to catch up. >> you don't have a clock, so, i'm going -- >> we don't have a clock? >> there's no clock going. >> mental clock. >> no, no. >> he's going to kick your:0 clock. let's go! >> now i'm confused. csx is a great company. people believes the market is bottoming out, i'm not so sure
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yet. hopefully i have my little chart. cs xh has gone up okay, but look at the other rails over that same time period. completely outperformed. you have to ask yourself, is the stock being punished for what the market views as a continued deterioration of the market? i think that's the case. i'm not saying to go short csx here. i think there are better places to play in the rails. >> doesn't your case assume that the lack of coal volume is not going to be made up in other areas -- >> and that's what the barron's -- >> sounds like you're making a call on who won. >> i'm just asking. >> here's what i say. coal volumes are down 31% since 2008, which was their peak. these guys are making it up. the valuation is where people says, it's cheap. you own it. >> pete wins. according to hash tag. >> grasso? >> well, coal is the biggest margin in all these rails. i'm not so sure. if global demand comes in a little bit here, or gdp comes in or the market cracks just a bit,
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just to be fair, i love them both, but i have to go guy's way. >> we have a draw. >> no fun. >> want to make it interesting. >> we'll see. >> and i have to tell you something -- great job by stephanie back in ec with train by blackfoot, teased into this a few minutes ago. >> train. >> we should go to the out-tro with that -- >> johnny cash. >> maybe we will. coming up next, where to find your best trades. plus, we reveal the viewer tweets making today's cut in "trade 'em." much more "fast" straight ahead. at farmers, we make you smarter about insurance.
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welcome back to "fast money." masco reported after the close today, the company, which provides building supplies and construction materials, beat estimates, reported a surprise profit top line clocked in at $1.9 billion, better thanks%ed. margins at 25%, up, as well. the ceo says he expects new home construction to show strong growth. the stock up some 40% in the afterhours. melissa, back to you. >> thank you, josh. a lot of the suppliers doing well. lpx, another one of these.
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>> masco's one of home depot's biggest suppliers. i don't think masco is where you want to go. you don't want to be chasing. the valuation is stretched. but home depot, i'll say it again, hd should go into this. let's move on here. japan's new government has taken major steps to weaken its currency and last week, it was hinted the your owe zone could consider doing the same. the global race to debase is coming up at the g-20 meetings. let's bring in amelia bourdeau. good to see you. there are indications that the g-7 drafted a statement, coming out with the g-20, saying they stand by their currency, there is no race to debase going on. so, what is the trade at this point, now that we know that is coming down the pipeline? >> well, they're going to rely heavi heavily, the g-20, that statement on the market.
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so, i'm looking for the your owe to weaken. appreciation of the euro could lead to deflation, so, that left the door open for the ecb to ease further. you would like to short the your owe ahead. i would short it a little higher, at 1.34, the figure. i put the target at 1.3150 and a stop at 1.3550. >> amelia, good to see you. see you on friday. >> i'll see you. coming up next, our favorite viewer tweets of the day. we'll trade them next, when "fast money" comes right back.
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let's play the good, the bad and the ugly with tim seymour. first, the good. back in january, tim gave a final trade on a brazilian airline. here's what he said. >> brazil's erj is not boeing. that's a long-term buy. >> nice call. shares have been soaring. they are up 19% since then. tim? >> announced a huge deal. their order book is strong. stock's had a big move and it's
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not cheap. you should have taken some profits. you still can here. i would. >> okay. now to the bad. a day after that call, tim made a call on verizon. >> that's my reason to sell it. in their best quarter ever, this stock's been dead money. 17 times. it is expensive to at&t. it's a stock where their wire line business is the only one that's growing margins. this is a shrinking business. >> get it, bad call, verizon? >> took you a minute, yeah. >> nice. >> shares of verizon up about 6% since tim laid out that -- >> that joke was about as good as my pick and let's just say they both weren't that great. the call is still the same. these guys have been in a sweet spot to do what they've been able to do and i don't think the margins can be anywhere near as strong. but 4.5% div yield, the numbers are good, i'm saying, i was bad. >> right on, man. >> wasn't ugly. >> speaking of which -- >> don't end the segment. what's our ugly for the night?
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>> i don't know. let's see. >> oh. that is so -- >> it gets funnier every time. that's what's so amazing about this dog. >> you know in "robocop" where they put that mask on him. it looks league -- >> it's just like that. >> you know what i'm saying. >> that is awesome. >> that was. >> go get it. you tweet it, we trade it. let's get to the tweets from today. for tim. paul tweets, bidu looks pretty interesting down here. what say you? >> between 90 and 110, it has a range in a down trend. i would wait nil 90. >> okay. this one is for the pit boss. c carmine tweets, been trading bank of america pretty well. thinking of getting back in using 20 day moving average and break at 50 -- >> yo, carmine. >> if you are looking at the short-term on this, the 10 and 20-day, it is holding there. if it breaks through there, it hasn't gotten through the 50-day for quite some time, you have to
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get to august. near $11, but it's around this $11.75 area right now. i own the upside calls. >> this one is for grasso. mike asks, what do you make of goldman sachs' reversal today at the half? >> i don't make much of it. for me, i'm looking at the 150 mark. i think the stock goes to 178. i think you're safe here. if it breaks down, then you have to be rn canned. this is normal for a stock that's been all over the place and doing one thing on a daily basis. going higher. i wouldn't worry. >> this one's for guy. chris tweets, great things from disney last week. they tried to short down but it held its own. slow churn higher here? >> c-mac, that's what it's been doing for some time now. we've liked disney for awhile. if this is your first foray into disney, i'd say wait a little. hold off. fool's rush in. it's been a great stock. >> only fool's rush in. >> i think, you know, this stock has pull-back before. if it does it again, buy it. >> pete? what do you make of disney?
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>> love disney. i really do. what they're doing right now and you look -- now espn, they really did pay a lot of money, to get themselves into the positions they are right now, across the different sports world, but i think that's going to pay dividends in the future. the name still is at a reasonable price. >> what is your favorite ride? >> excuse me? >> oh, at disney? >> yeah, on the subject of -- >> this is well within the subject. >> mr. totes wild ride. >> i don't think that's there anymore. >> i go right to the hall of presidents. >> that's not a ride. it's a demonstration. >> pay a ticket to get in. and mr. totals wild ride -- >> why would you do a demonstration? >> why not? educational. >> not why i'm going to disney. >> first move tomorrow when we come right back. stay tuned.
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